What If You Were Missing The Value In DIS Stock?

Here is why we think Walt Disney (DIS) deserves consideration as a value stock.

• Reasonable Revenue Growth: 5.0% LTM and 5.3% last 3 year average.
• Cash Generative: Nearly 12.2% free cash flow margin and 14.8% operating margin LTM.
• No Major Shocks: DIS has avoided any revenue collapses in the last 3 years.
• Modest Valuation: Despite encouraging fundamentals, DIS trades at a PE multiple of 17.7
• Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, but lower margins

As a quick background, Walt Disney operates worldwide as an entertainment company providing media distribution, theme parks, resorts, and related experiences through its global segments and subsidiaries.

*LTM: Last Twelve Months

But do these numbers tell the full story? Read Buy or Sell DIS Stock to see if Walt Disney still has an edge that holds up under the hood.

That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure

Stocks Like These Can Outperform. Here Is Data

For 65 similar value stocks chosen as of mid 2024, consider the following stats for the subsequent 1 year period.

• Average peak return of 39.3% vs 14.4% for S&P, with maximum peak return of 133%
• Win rate of 60%; win rate represents % of stocks with positive return
• Average 1-year return of 14.6%, similar to S&P’s despite tariff instability

But Consider The Risk

That said, Disney isn’t immune to big drops. It fell over 60% during the Dot-Com Bubble and pulled back about 56% in the Global Financial Crisis. The inflation shock last year hit it nearly as hard, with a 61% dip. Even the Covid sell-off caused a 42% drop, while the 2018 correction saw a more modest 16% loss. Solid fundamentals matter, but when the market turns, Disney can still take a serious hit.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read DIS Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.